The total European market improved during the year. Cost savings in combination with strong focus on the most profitable product categories, brands and sales channels led to continued earnings improvements.
Daniel Arler is Head of Major Appliances Europe, Middle East and Africa as of
February 1, 2016.
Europe comprises the Group’s largest market and Electrolux has a broad offering under the three main brands: Electrolux, AEG and Zanussi. In many countries and segments, the Group has strong market positions with a particularly strong position in kitchen appliances, such as cookers, hobs and built-in appliances. Market demand for appliances increased by 5% in Western Europe, while demand in Eastern Europe was impacted by continued substantial declines in Russia and the Ukraine, and decreased by 17%. The total European market grew by 4%, excluding Russia.
The Western European market continued to be characterized by price pressure. One of the key reasons for this is the nature of the market with an increased global competition and a large number of manufacturers, brands and retailers.
Africa and the Middle East comprise a large number of countries with significant variation in terms of wealth and degree of urbanization. However, a common theme is that demand for appliances increases in parallel with growing prosperity. The Electrolux Group’s growth strategy in this region is targeting primarily Egypt, Saudi Arabia and a number of countries in the Lower Gulf Region.
Continued intense focus on the two premium brands, AEG and Electrolux, as well as investments in innovation with clear consumer benefits in combination with a targeted marketing strategy has enabled the Group to increase market shares in important segments, such as the built-in kitchen and premium-laundry product categories.
During the year, several new innovative products were launched, such as new energy-efficient tumble dryers with heat-pump technology under the AEG brand. The Group’s focus on development of connected products resulted in the introduction of the world’s first connected steam oven with an integrated camera, the AEG ProCombi Plus Smart Oven. Another unique launch made is a new range of multifunction ovens with the PlusSteam function targeting consumers who bakes at home but cannot afford a top-of-the-range steam oven.
A clear trend continues toward consumers increasingly using digital channels for retrieving information about and purchasing appliances. Electrolux has put substantial emphasis on developing digital solutions for communication with consumers about offered benefits throughout the entire process, from research into the various product offerings to using the product for maximized satisfaction.
During the year, the Electrolux Continuous Improvements Program was launched, which comprises a new cross-functional approach to concurrently raise customer value and reduce costs. Continued savings measures under previously initiated programs led, among other things, to increased operational efficiency.
During the year, Electrolux decided to relocate refrigerator manufacturing in Mariestad, Sweden, to Nyíregyháza in Hungary as part of the efforts to improve manufacturing competitiveness. The transfer will be carried out in stages and will start in the latter part of 2016. In April 2015, a new state-of-the-art cooker plant was opened outside of Cairo in Egypt. The plant is the largest of its kind in Africa and the Middle East, and strengthens the Group’s competitiveness in the region.
Major Appliances EMEA recorded organic sales growth of 4.4% in 2015. This growth was mainly a result of increased sales volumes and an improved product mix, which more than offset continued price pressure.
Operating income improved significantly, mainly as a result of product-mix improvements and increased cost efficiency.
Electrolux has a broad and innovative range of steam ovens on the market. Innovative CombiSteam ovens have been launched in Europe under the Electrolux and AEG brands. In 2015, Electrolux introduced, at IFA, the world’s first connected steam oven, with a built-in camera, under the AEG brand. Consumers can start and monitor their cooking process remotely via an app on a mobile device, see page 29.
The AEG AbsoluteCare tumble dryer, A+++ energy class, takes care of hand-wash only woolens and silks without shrinkage. The AbsoluteCare dryer removes consumers’ underlying distrust of dryers and the fear that the dryer will damage their clothes. This means they can use the full potential of the dryer without having to worry about potential damage.
The new Electrolux air-conditioner uses smart technology and can be monitored remotely via an app on your mobile device. This new range has already won a Red Dot Design Award for its elegant Scandinavian design and functionality. The air-conditioners are being sold in Saudi Arabia, UAE, Qatar, Oman, Bahrain, Kuwait, Jordan and Lebanon.